The Dollar was fairly steady in N.Y. trade on Wednesday, though had bounced some in London morning trade. The DXY peaked at 97.55 into the open, later settling into a narrow trading band. Sentiment was aided by a better ADP employment report. Risk-on conditions prevailed following Tuesday post-Fed rate cut panic, allowing stocks to rally sharply. Treasury yields however, continued to fall, as markets priced in further Fed easing. EUR-USD bottomed at 1.1095, later trading over 1.1140. USD-JPY slipped to 107.15 early in the session, managing a high over 107.50 into the London close. USD-CAD rallied sharply to over 1.3430 following the unexpected BoC 50 basis point rate cut, while Cable topped 1.2860 from near 1.2800 at the open.

[EUR, USD]EUR-USD bottomed at 1.1095 into the services ISM, since rising to 1.1145. Bigger picture, the the dollar's rate spread advantage has remained under pressure for a few weeks now, with Tuesday's 50 basis point Fed rate cut obviously impacting greatly on that front. The ECB has little scope to ease further going forward, which will likely keep EUR-USD in buy the dip mode for now. Offsetting to a degree, will be the generally better performing U.S. economy relative to Europe. The next upside target is the December 31 high of 1.1239.

[USD, JPY]USD-JPY recovered from fresh five-month lows of 106.85, peaking at 107.61 in early N.Y. trade, as risk-on conditions prevailed through the session. The pairing had pulled back to 107.15 lows in mid-morning, though the stronger services ISM lifted the Dollar back over 107.50. Risk taking levels will likely continue to drive USD-JPY direction, and given the uncertainty of the coronavirus, bouts of safe-haven Yen buying are likely to continue.

[GBP, USD]Cable lifted to near 1.2860 in N.Y afternoon trade, up from near 1.2800 at the open, with the pair consolidating at moderately firmer levels after printing a five-month low on Friday at 1.2726.The UK's February construction PMI recovered to 52.6 in the headline reading, up from 48.4 in January, though the data seems somewhat backward looking given the probable economic impact of measures being taken to contain the spread of the COVID-19 virus.

[USD, CHF]EUR-CHF was fairly steady under 1.0650 on Wednesday, after falling to 4 1/2 year lows of 1.0584 last Friday, with the safe-haven franc pulling back some as EUR-USD showed strength after the 50 basis point Fed rate cut. It is likely today's price action was just a pause in EUR-CHF declines, with much uncertainty remaining over the coronavirus outbreak. Switzerland reported its first case of the disease last week. The Swiss franc can be expected to rise further in the coming days, should the virus continue to spread.

[USD, CAD]USD-CAD rallied following the BoC's 50 basis point rate cut, moving over 1.3431 highs from 1.3315. The BoC had little choice in the matter following the Fed's 50 bp cut on Tuesday, though today's risk-on backdrop, along with firmer oil prices, should limit further gains going forward. Next upside target is Monday's 1.3441 top. The BoC statement indicated the large cut was due to the coronavirus outbreak. "COVID-19 represents a significant health threat to people in a growing number of countries. In consequence, business activity in some regions has fallen sharply and supply chains have been disrupted. This has pulled down commodity prices and the Canadian dollar has depreciated. Global markets are reacting to the spread of the virus by repricing risk across a broad set of assets, making financial conditions less accommodative. It is likely that as the virus spreads, business and consumer confidence will deteriorate, further depressing activity."